Two proteins, barnase, the extracellular ribonuclease of Bacillus amyloliquefaciens, and barstar, its intracellular inhibitor, are used as a model system for the study of protein folding and proteinprotein interactions. Barnase is one of a homologous group of ribonucleases occurring in both prokaryotes and eukaryotes. Recombinant DNA techniques are being applied with three major aims: (1) to facilitate production of wild type and mutant proteins; (2) to examine the structural and control sequences of the genes; and (3) to make specific changes in the sequences to test theories of folding and probe the barnase- barstar interaction. The lethal effect of the cloned wild type barnase gene can be repressed by expression of the barstar gene on the same plasmid. E. coli plasmid vectors have been devised for both proteins and both can now be obtained essentially pure in 100 mg quantities. DNA and amino acid sequences are known for both and the x-ray structure of barnase has been refined to 2.0 Angstrums. The structures of both proteins in solution are being studied by 2-D NMR. A synthetic fluorescent substrate has been used to study hydrolysis kinetics and to look at the kinetics and stability of the barnase-barstar interaction for native and mutant proteins. Some 50 variations in the sequence of each protein have been obtained by oligonucleotide-directed mutagenesis. Some of these were aimed at specific questions, but most are part of a survey of the protein surfaces designed to locate their areas of interaction. Our most important finding with these mutants is that the two Cys residues of barstar can both be replaced by Ala without loss of activity or yield, greatly simplifying future studies of barstar folding.